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Macy's Imprisons Minority Customers and Extorts Them for Bogus Fines: Suit

By Maya Rajamani | December 3, 2015 7:57am | Updated on December 3, 2015 9:34am
 A woman has sued Macy's claiming it is running a
A woman has sued Macy's claiming it is running a "scheme" that forces accused shoplifters to pay fines.
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Getty Images/Spencer Platt

MIDTOWN SOUTH — Cinthia Carolina Reyes Orellana had just finished trying on a set of shirts at Macy's Herald Square one evening last summer, when she carried the two she planned to buy out of the dressing room and down the escalator to the floor below to continue shopping.

But as soon as the 29-year-old stepped off the escalator, a Macy’s security guard grabbed her, seized her purse, accused her of planning to steal the shirts and forcibly escorted her to a holding cell in the basement, according to a lawsuit.

Over the next three hours, she was searched, questioned, denied access to her phone to contact a lawyer or her family and ordered to admit her guilt by signing legal papers and forced to pay a $100 fine in cash before the security staff turned her over to the NYPD, according to the suit.

Macy's then continued to harass her via mail, demanding additional fines even after the initial fee, in what her lawyer describes as a continuing policy by Macy's to shake down minority customers.

► NYPD Officer Says Macy's Racially Profiled Her in Black Friday Arrest

“This coercive collection practice or scheme has become so profitable that Macy’s … has dedicated an entire unit within its existing store, which operates like a typical jail, equipped with holding cells, where alleged shoplifters are held for hours on end, and are pressured, threatened, and often harassed until they find no reprieve but to make civil penalty payments to [Macy’s],” according to the lawsuit filed last month in Bronx Supreme Court, but which has since been transferred to Manhattan Supreme Court.

The class-action lawsuit estimates that thousands of customers have been targeted using a similar “money collection scheme” that lawyers say preys upon black, Hispanic and other minority customers using a “shopkeeper’s privilege” rule in New York's General Business Law that allows retailers to detain customers they believe tried to shoplift and ask them to pay a civil penalty without proving them guilty.

"What the lawsuit aims to do, is to finally put an end to this practice, and bring justice to past victims, whom we encourage to come forward and join Cinthia," Orellana's attorney, Faruk Usar of Usar Law Group PC, wrote in an email to DNAinfo.

He encouraged other New Yorkers who have been subjected to similar treatment at Macy's to come forward, adding that they "should never have to shop in fear of being frivolously/falsely accused and prosecuted for theft."

► 'Treme' Actor Arrested at Macy's for Buying Mother a $1,350 Watch

A representative for Macy’s on Tuesday said the company does not comment on ongoing litigation, and added that it could not comment on its current policy regarding shoppers carrying unpurchased merchandise between floors.

The lawsuit is the latest to allege racist business practices at Macy's, which came under a firestorm of criticism after a flood of black and Hispanic customers came forward with similar tales of being falsely accused of shoplifting by store staff, including "Treme" actor Robert Brown.

Macy's agreed to revamp policies related to detaining potential shoplifters on August 20, 2014 following an investigation by Attorney General Eric Schneiderman.

But Orellana's lawsuit claims the retailer has continued employing unfair practices in violation of its agreement with the AG.

After she was detained at Macy's on July 18, 2014, security staff handed her over to the NYPD, who took her to the Midtown South Precinct, where she was charged with petit larceny and criminal possession of stolen property — charges that were dropped a year later, according to the suit.  

Yet Macy’s continued to harass Orellana after signing its agreement with the AG's office, sending her a series of letters on Sept. 2 and Sept. 17 of 2014 through a law firm called Palmer, Reifler and Associates PA ordering her to pay an additional $199.80 to settle a civil claim related to the arrest, the suit said.

The Palmer, Reifler and Associates website touts its background as a "leading civil recovery law firm in the loss prevention/asset protection industry" and adds that it helps large retailers craft a plan to crack down on would-be shoplifters. 

Orellana is not the first accused shoplifter to take on a major retailer's use of the "shopkeeper's privilege" law.

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In November 2014, Wal-Mart Stores agreed to an undisclosed settlement with a customer named Timikia Pegues in Maryland federal court following similar allegations, according to court filings.

Pegues was cuffed and detained by Wal-Mart security guards after she tried to return a bassinet her mother bought, discovered her mother had given her the wrong receipt and attempted to leave with the already-purchased bassinet to get the correct receipt, according to her lawsuit against the store in March 2014. 

Jimin Chen sued Home Depot in 2013, saying the company used false threats of criminal charges to coerce accused shoplifters into paying fines.

Chen's suit cited the same law firm named in Orellana's suit as the firm seeking payments via letters on behalf of Home Depot, according to the report. 

In connection with the August 2014 settlement with Macy's, Attorney General Schneiderman released a statement saying the settlement would ensure equal treatment for customers at Macy’s stores throughout the state. As part of the settlement, Macy's agreed to revamp policies related to detaining potential shoplifters.

Schneiderman's office did not immediately have a comment on Orellana's lawsuit.

In October 2013, actor Robert Brown, who played a musician in HBO’s “Treme” and starred alongside Sean Connery in “Finding Forrester,” sued Macy’s and the NYPD after undercover detectives accused him of using a stolen credit card to buy a $1,350 Movado watch at the Herald Square store as a graduation present for his mother.

Brown settled with Macy's and the city less than a year later for an undisclosed amount.

A month later, a Hispanic resident of The Bronx slapped the department store with a $40 million suit claiming she lost her NYPD probationary officer job after being wrongfully arrested for shoplifting at Macy’s Herald Square. Mendez, too, agreed to an undisclosed with Macy's, in November 2014, court filings showed.